The IRS requires you to report the foreclosure and the resulting gain or loss on a Form 4797. If the foreclosure results in a long-term capital gain, then you also need to include the amount on a Schedule D attachment to your personal tax return. However, if you incur a loss, Form 4797 by itself is sufficient.

Does the IRS have collection suspension activities?

Beginning March 30, 2020, the IRS generally suspended the initiation of levies and NFTLs until at least July 15, 2020. “New” levies and NFTLs will not be initiated until after July 15, 2020, unless there are pressing circumstances.

What do you call a tax lien foreclosure?

A tax lien foreclosure is one of two methods a government authority may use to address delinquent taxes on the property; the other is called a tax deed sale.

What are tax foreclosure sales?

Tax lien foreclosure is the sale of a property resulting from the property owner’s failure to pay tax liabilities. A tax lien foreclosure occurs when the property owner has not paid the required taxes, including property taxes and federal and state income taxes.

What kind of tax form do I get after foreclosure?

You’ll receive one of two tax forms after foreclosure, or perhaps both: Form 1099-A is issued by the bank after real estate has been foreclosed upon. This form reports the date of the foreclosure, the fair market value of the property, and the outstanding loan balance immediately prior to the foreclosure.

Can a tax lien be placed on a specific property?

A statutory lien is first placed against the property of the person who has failed to pay taxes. Tax liens can be specific liens against specific property, such as with property taxes and special assessment liens, and can also be general liens against all property of the defaulting taxpayer, such as with federal or state income tax liens.